Presidency Fights Dirty Over VAT Collection, Accuses Rivers State Governor, Nyesom Wike, Of Collecting Tens Of Billions Of Naira For Projects He Never Executed By Himself, Says The Federal Government Is Not Hijacking The Funds From Niger Delta To The ‘Poor’ North

The Presidency has on Monday, disclosed that the President Muhammadu Buhari Federal Government has not been taking money from the Oil rich Niger Delta region to fund the Northern States, Page 36 learnt.

The disclosure was made by the Senior Special Assistant to the President on Public Affairs, Ajuri Ngelale, when he appeared as a Guest on Channels Television. 

Ngelale, who said that he is from Rivers State, attacked the State Governor, Nyesom Wike, over his alleged ethnic posture, saying that VAT collection by the Federal Inland Revenue Service, FIRS, is about “harmonised tax policy”, to make businesses easy for Nigerians.

He warned that VAT collection by States would lead to double taxation, which could make survival difficult for business owners in the country. 

The President’s Aide noted that the Federal Government makes contributions to the generation of VAT in the country, stressing that, Rivers, Lagos, and other States, do not generate VAT by themselves.

His exact words: “I do disagree on the notion that States are by themselves generating VAT enmasse, and the Federal Government is trying to hijack (it).

“In 2020, the nation generated about N1.5 trillion in VAT. We have about 60 percent of VAT coming from imports at the Ports. As we know, Ports infrastructure in the country is not controlled by the State Governments, so they cannot say that it is their revenue; it is controlled by the Federal Government, it is Federal Revenue.

“Aside from the fact that we have a book coming from imports, we also have that second to Lagos is Abuja, with about N202 billion collected, and the reason why is because Abuja is the site of Federal Ministries, Departments and Agencies, and a huge bulk of that collection in the country was coming from VAT collected on contracts.

“So, when we create the impression that States collect these VATs and the Federal Government is hijacking it and trying to share it, when in fact, it only (belongs to) Lagos or Rivers, I think it is a gross over-simplification.

“Anything that will perfect our union should be embraced. Any conversation, any serious-minded discussion around how resources are managed is healthy for the country.”

Speaking further, he said that the VAT issue has been “heavily politicised”, and also complained about “some of the utterances, unfortunately, that have come from my States along ethnic lines, etc, and political posturing, ahead of the next election”.

“I really do not want to repeat some of the stuffs we have heard from the Rivers State Governor, that we, Federal Government, want to take Niger-Delta money to the North, and all this ethnic sabre-rattling. That is what I am talking about when I say politics.”

He stated that in January 2021, that the Federal Government refunded to the Rivers State Government, the N78 billion it spent on Federal projects, saying: “There are those who despite collecting tens of billions of naira from this administration in form of refund for Federal roads, that they did not even construct in their States, and you still have these claims coming out trying to abuse the Federal Government, because of political reasons.”

Furthermore, Ngelale acknowledged that there are grey areas in the collection of VAT in the country, but sought for better specificity between who should collect taxes, between the Federal and States Government.

According to him, on the one hand, it may not be clearly stated in the 1999 Constitution, as amended, but on the other hand, it would be wrong to say that, because we have a VAT Act that was enacted by the National Assembly.

He, however, expressed optimism that now that the matter is in court, the Judiciary would serve justice on the case.

“Fortunately for us, it is now in a judicial process, and we are very much expectant that the outcome of the law will reflect the law that we have, which until now, States have no business abiding in… I believe our court system will do justice to the matter.”

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